PCI Law: Should retailers pay when they lose card data?

Is PCI-DSS (Payment Card Industry Data Security Standard) a Sufficient Standard of Care to Support Retailer Liability to Banks?

Credit Card Number Security Incident Response

The mechanics and theory of credit cards are so jerry-built that it is legally unfair to make merchants pay damages to anyone when credit card data leaks to criminals. The credit card system was not designed with the idea that merchants would need Fort Knox-style security to protect electronic information. It was only after the system became wildly popular that financial institutions (acting through the PCI) articulated heavy data security burdens for merchants.

It remains an open question whether the johnny-come-lately PCI rules are effective at protecting the credit card system. Even after a merchant spends lots of money becoming "PCI compliant," hackers can still break into the merchant and steal the little units of data (name, account number, expiration date, security code) upon which the system so heavily relies. That's not because the merchant is negligent or guilty of privacy crime. It is because commercial information systems are inherently vulnerable to modern hackers in search of discrete units of data like names and numbers that are used over and over and over again.

Mr Wright is a frequent public speaker at professional groups like state CPA societies and Institute of Internal Auditors. As author of technology law books such as Law of Electronic Commerce, he blogs on electronic data, records, security and social media law, and he spots trends, such as the rise of activists and whistleblowers wielding small video cameras. 2010: Russian financial authorities tapped Mr. Wright for advice on regulation and investigations in the micro-finance industry.

Mr. Wright mentors students at SMU's Lyle School of Engineering. He is a member of the Pennsylvania College of Technology Advisory Committee for the Information Assurance and Cyber Security Degree.

Mr. Wright is known for bringing attention to the power of terms, conditions, contracts, disclaimers, warnings and other notices -- like those below -- published through online media.

IMPORTANT: No public comment by Mr. Wright (blog, book, tweet, video, update, speech, article, podcast or the like) is legal or other professional advice. If you need legal advice, you should hire and consult a lawyer.

Mr. Wright's public statements are offered as-is, with no warranty of accuracy or reliability. Mr. Wright sometimes revises his published ideas. If you use the ideas, you do so at your own risk.

Public Education and Discussion

Mr. Wright's blogs, tweets, videos, web comments, web courses and the like are intended to promote public education and discussion. They are not intended to advertise or solicit legal services. They constitute an online update service for the book Law of Electronic Commerce. Originally released 1991, and revised continually since then, the book is published by Wolters Kluwer.

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Mr. Wright strives to comply with all applicable laws. He does not have and never has had intention to infringe the rights of anyone. If any person has any information, suspicion or belief that Mr. Wright has done anything illegal or unethical, he asks that person promptly to (a) notify him at 1.214.403.6642 (b) comment publicly on his blogs or pages that he is wrong. Promptness helps mitigate damage.

Any person accessing Mr. Wright's blogs, tweets, profiles, comments, web pages or other public activities or statements agrees not to use data from them in a way that is adverse to Mr. Wright's interests.

Forming an Attorney-Client Relationship

Mr. Wright does not have an attorney-client relationship with any person unless and until he and that person explicitly, formally agree that the relationship is being formed. Interaction with Mr. Wright through public media does not create an attorney-client relationship. Exchange of private messages with Mr. Wright does not, by itself, create an attorney-client relationship.

Privacy/Security Vision

Some people provide Mr. Wright private information. Mr. Wright strives to treat such information reasonably according to the circumstances. People should have no more than reasonable expectations about information security. It is unreasonable to expect that the offices, computers, cell phones, brief cases, filing cabinets and online or other services used by Mr. Wright are very secure.

IMPORTANT Confidentiality Notice

Benjamin Wright is licensed as an attorney. Some of Mr. Wright's non-public records stored in the cloud are confidential and subject to protections associated with attorney work and communications. The laws of many countries recognize such protections. Mr. Wright insists that you recognize those protections with respect to his records and communication.

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The only person responsible for Mr. Wright's words is Mr. Wright.

Mr. Wright often earns financial or other reward from those he mentions or links on blogs and social media, such as Yellow Brick, Messaging Architects/Netmail, SANS Institute, Credant Technologies, state CPA societies, Park Avenue Presentations, LabMD and others.

Attribution

Some images, sounds and font output associated with Wright's work and comments are copyrighted by Corel Corporation or its licensors or partners like iStockphoto; they reserve all their rights. Some images are declared on wikimedia to be public domain. Mr. Wright strives to respect IP rights, but sometimes technology behaves in surprising ways. If you are an IP owner and you have a problem with something published by Mr. Wright, please telephone him promptly. Trademarks are property of their respective owners.

Wright`s Public Appearances

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Strangest InfoSec Law Case ... Ever

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SANS Quote

Professional Education. "The best legal trainer in the country on these issues is Ben Wright." --Stephen H. Chapman, Principal and CEO, Security Advisers, LLC, and student in Mr. Wright's SANS legal training